Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

Negative Time Decay ‒ Just a Macroeconomic Puzzle Piece - Lower Commodity Prices

‒ Ebbing Macro, Wobbly Equities Matter Most for Crude Oil Prices

‒ An Unprecedented Foundation for Advancing Gold and Silver Prices

‒ Double Red Lights for Agriculture Prices: Corn and the Dollar

CONTENTS

02 Broad Market Outlook

03 Energy

05 Metals

10 Agriculture

DATA 15 Performance

19 Curve Analysis

22 Market Flows

25 Performance

Blo

om

berg

Termin

al In

dices

1

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

Data and outlook as of August 30

Mike McGlone – BI Senior Commodity Strategist

BI COMD (the commodity dashboard

Note ‐ Click on graphics to get to the Bloomberg terminal

Just a Macroeconomic Puzzle Piece - Lower Commodity Prices Performance: Aug. -2.3%, 2019 +1.9%, Spot +3.2%. (Returns are total return (TR) unless noted)

(Bloomberg Intelligence) -- The passage of time will be unfavorable, as we see it, with rapid deterioration in typical commodity-price companions unlikely to reverse. Plunging bond yields, increasing stock-market volatility and the strong dollar add pressure, particularly to oversupplied energy, agriculture and base metals. We expect precious metals to remain the stalwart sector, as moribund silver and platinum gain buoyancy with the rising gold- and bond-price tide. A catalyst to reverse the entrenched trends, namely a definitive U.S.-China trade accord, is unlikely. What's likelier is that primary industrial commodities will catch up a bit to bond yields. The 52-week averages for crude oil and copper turned down last year, when the macroeconomic tide was more elevated. Commodity bulls need a peak greenback, but Fed easing seems too little, too late. Receding Broad Commodity Tide Broad Commodities Appear to Be on Cliff's Edge With Copper. The strong dollar, plunging yields, oversupply and trade tensions are predominant themes that should continue to weigh on the more macro-vulnerable commodities, particularly crude oil and copper. Crude oil is at risk of following the red metal toward last year's low. Primary Commodity-Pressure Factor - Time Decay. Commodity prices appear elevated vs. the receding macroeconomic tide. Absent a definitive catalyst for reversal, the passage of time should keep pressure on commodities. Our graphic depicts macro leaders -- the plunging yuan and bond yields -- reaching new lows, yet the Bloomberg Commodity Spot Index remains above last year's trough. More industrial-based crude oil and copper are at elevated risk vs. the ebbing tide. Gold and precious metals should continue to recover with stock-market volatility.

Copper has breached 2018's low, indicating similar for crude oil. WTI crude oil bottomed at $42.36 a barrel vs. about $56 at the end of August. This disparity is one of the greatest risks for the broad commodity market, if the world's most significant commodity can resist the receding tide.

Macro Trends - Plunging Bond Yields and Yuan

Macro Outlook - Higher Gold, Lower Crude Oil. Elevated crude oil is a prime candidate on our 2019 macro-performance board to continue to mean-revert lower. The Bloomberg Barclays U.S. Treasury 20+ Index at the top, and copper near the bottom, appear to be the more-enduring trends. A continued stock-market pullback is one of the likelier potential forces to dislodge crude from its top spot. If the S&P 500 Total Return -- up 22% at its peak in July -- continues to give back gains, 4Q could very well be similar to the year-ago period, but more enduring.

Creeping higher, the dollar is one of the most significant headwinds for broad commodity prices. One of the weaker 2019 performers yet ending August about 2% higher despite the Federal Reserve's shift to an easing cycle, the greenback indicates further appreciation potential. Crude Oil at Risk of Heading Towards Copper

Learn more about Bloomberg Indices

2

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

Precious Metals Likely to Take Performance Gold.

Our sector outlook favors further appreciation of precious-metals prices and depreciation of energy gains from earlier in the year. The primary question is what it might take to end these 2H trends. Some back-and-fill should be expected, but we fear the unlikely is necessary to arrest a more likely continuation of the 2H18 risk-off swoon. Two-year lows in copper reached in August vs. six-year gold highs are indicative of the unfavorable macro trends. As a broad sector, metals should be stable, with an upward bias due to the diversification of precious vs. industrials. A Commanding Lead - Precious Metals

Agriculture has limited upside due to the strong dollar and stunted corn prices on yet another good Corn Belt production year, but some inkling of a respite in trade tensions should boost soybeans, as exports to China can't get much lower.

Energy (Index weight: 29% of BCOM) Performance: Aug. -5.7%, 2019 +4.5%, Spot +4.3% *Note index weights are the 2018 average.

Oversupplied, Macro Negative Ebbing Macro, Wobbly Equities Matter Most for Crude Oil Prices. Crude oil prices are at increasing risk of following bond yields lower, with the stock market acting as a final pillar, in our view. Expected OPEC+ production cuts in the face of deteriorating price conditions are playing out. Risks are increasing of a more enduring repeat of the 2H18 decline. OPEC's Losing Battle With Crude Oil Prices. The third-most significant cut in production in the past two decades depicts OPEC's losing battle with prices. Our graphic suggests the current peak-to-trough production decline of about 4 million barrels a day is similar to about 5 million in 2008-09 and 2000-02. What's different this time is striking. Both previous supply-cut periods occurred as Brent crude backed away from new highs and sharp corrections in

equities as measured by the MSCI World Index. This time, the stock market is near record highs, and crude oil prices peaked 11 years ago. Brent Crude Peaked 11 Years Ago - Trend Is Down

In 2H18, the near-simultaneous decline in crude oil and the S&P 500 exemplified oil's inability to rally, yet increasing downside risks with wobbly equities. Production cuts are stabilizing prices, but an advancing stock market should be necessary to sustain higher crude oil prices. Wobbly Crude Oil Risks Resuming Downtrend. The more important question for crude oil is what it might take to end the price downtrend since the 2008 peak. Lower is the path of least resistance, and our concern is WTI crude oil will dip below last year's low close of $42.53 a barrel. Supply outpaces demand and the macroeconomic backdrop has worsened from the last breakdown in 2014-15. The JPMorgan Global Manufacturing Index stands at about 49, below the 50 threshold, vs. averaging 51.6 five years ago. Oil Needs a Significant Catalyst to End Decline

Stock-market volatility is on the rise. In 2014-15, the CBOE S&P 500 Volatility Index (VIX) was in decline, averaging 14.8. The 200-day mean is about 17 now vs. 14 a year ago. Absent a sustained geopolitical bid, oil prices appear to be teetering

3

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

on the potential for more OPEC+ production cuts. Trend No Friend to Crude Oil, Bond Yields. West Texas Intermediate crude-oil prices are retreating and we see little to get in their way, though we do expect bumps in the road. The 2016-18 recovery now looks like a mere blip in the midst of the decline since the 2008 peak. This year's stall in WTI prices at about $60 a barrel has a deteriorating foundation if U.S. Treasury bond yields are a guide. Yields and oil prices both peaked in 2008 and bottomed in 2016. The 30-year yield near all-time lows portends similar downside for WTI crude prices. 2016-18: A Wave in Receding Macroeconomic Tide

Treasury bond yields are prime indicators of inflation expectations and loan demand, while crude oil can be a key inflation driver. The trend-is-your friend rule indicates both should continue lower. Crude Oil and Unfavorable Demand vs. Supply. Crude-oil prices appear too high relative to unfavorable demand vs. supply. Our graphic depicting the 12-month average of global demand vs. supply from the Energy Intelligence Group shows Brent crude should be closer to $50 a barrel vs. about $60 on Aug. 13. Auto scaling helps emphasize the strong relationship in our average of demand vs. supply over the past 15 years. Incremental demand has much lower volatility and is declining with an ebbing economic tide, leaving a sharp cut in supply or lower prices as the primary rebalancing factors.

Demand vs. Supply Balance Is Negative for Prices

Some combination of both are likely, in our view, led by supply cuts from Saudi Arabia. Needing reductions from the world's largest exporter to stabilize prices doesn't reflect a bull market, notably as higher prices will encourage production from other sources. Stuck Tight, Natural Gas Poised for a Bounce. Natural gas is more likely to gravitate toward resistance at about $3 per million BTUs vs. holding below $2 support in the near term, but the bigger trend remains lower, in our view. Indicating the downdraft is getting a bit overdone, 52-week Bollinger Bands have ballooned to near their widest in five years. Last year's narrowest-for-longest bands in futures history (1989) preceded the price spurt that transitioned to the current decline. The steady one-year futures curve is another price support indication.

Natural Gas Set for Bounce Toward $3.00

Since the beginning of 2014, the curve has averaged 4.9% in contango, about the current level. The front futures price has averaged $3.05 vs. about $2.20 on Aug. 21. A forward-looking demand vs. supply indicator, the one-year curve should be trending more clearly toward contango to indicate further downside in prices.

4

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

Process of Giving Back 2019 Gains Set to Continue

Front Energy Futures to August 30

Market Flows – Commitment of Traders

5

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

Metals All (Index weight: 35% of BCOM) Performance: Aug. +4.0%, 2019 +12.2%

Industrial (Index weight: 19.0% of BCOM. Performance: Aug. +0.5%, 2019 6.7%, Spot +5.7%)

Precious (Index weight: 16.1% of BCOM. Performance: Aug. +7.6%, 2019 +18.0%, Spot +19.0%)

Gold Bull Market Resumption An Unprecedented Foundation for Advancing Gold and Silver Prices. Markets are in the early days of acknowledging the potential upside in primary store-of-value, quasi-currency, diversifier assets gold and silver, in our view. Plunging and increasingly negative bond yields, central-bank easing, trade and currency wars, elevated debt-to-GDP levels and a contentious U.S. presidential relationship with the Federal Reserve are price tailwinds. About five years of gold-price consolidation and mean-reverting U.S. stock market volatility from historic lows last year are a launch pad for precious metals.

Copper was an early macroeconomic warning last year when it declined over 20%. Base metals appear set to resume the bear market in place since the 2011 peak. Precious metals are poised to simply resume the bull market since the onset of the millennium. Shining Gold & Silver

No Need to Complicate Things as Gold, Silver Resume Bull Markets. Gold and silver are well-rested and far below all-time dollar-denominated highs in a favorable environment for sustained price advancement. The primary question is what it might take to reverse the seemingly entrenched -- and potentially nascent -- trends supporting a resumption of the precious metals bull market.

Recovering Stock-Market Volatility Supports Gold. Rising U.S. stock-market volatility is a primary force supporting gold and silver prices. We believe price supports for most other dollar-denominated precious metals trickle down from the CBOE S&P 500 Volatility Index (VIX) recovering from record lows last year (on a 20-month average). If the upward trajectory in volatility reverses, the gold rally should stall. If volatility mean reverts, as is typical, gold and silver have plenty of potential upside.

Bullish precious-metals drivers, including Federal Reserve easing, negative real yields and plunging bond yields, emanate from recovering stock-market volatility. The final pillar for gold and silver is a peak dollar. That remains elusive, but increasing equities volatility is a greenback tailwind.

Gold & Silver Foundation - Increasing Volatility

Gold Looking Low vs. Equities and Fed Easing. Gold is set for a period of outperformance vs. the stock market, if the last Fed easing cycle is a guide. It was about 13 years ago that the one-year fed funds futures spread began indicating a similar rate-cut cycle. From a macroeconomic standpoint, a repeat of this would be disconcerting. The ratio of spot gold vs. the S&P 500 broke out higher about a year later as the Fed began to cut rates in September 2007. Our graphic depicts similar potential, with the gold-to-S&P 500 ratio at about the same level and in a consolidation pattern.

Gold/S&P 500 Set to Follow Fed Easing

With New Gold High in Euro Terms, Dollar-Based Is Next in Line. There are many factors to stall rallying gold, but we see little to reverse the longer-term positive price progression. Dollar-denominated gold is likely to follow all-time highs in euro terms reached Aug. 26. Sustained greenback strength and declining stock-market volatility are pressure points. Our graphic depicts dollar-based gold falling behind the metal's denomination in weakening euros, yet divergent strength is a key takeaway.

6

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

Dollar-Demoninated Gold to Follow Euro

Despite the trade-weighted broad dollar rallying about 10% since the start of 2018, dollar-valued gold has increased 15%. Trade tension and diminishing macroeconomic conditions have been drivers, but increasing stock-market volatility is a primary gold-price support. Indicating mean reversion potential, last year the S&P 500's 260-day volatility gauge bottomed from the lowest level since 1966.

Increasing Incentive to Borrow Supports Gold. The seemingly unstoppable decline in bond yields is a green light for governments to continue to borrow, spend and stimulate until yields and inflation revive. Gold and precious metals are primary beneficiaries in most outcomes. Our graphic depicts the euro-denominated gold price near an all-time high, with German bond yields plunging into negative territory. Dollar-based gold is on a similar path, with little to stop the upward trajectory there and in bond prices.

Accelerating Trends -- Gold Higher, Yields Lower

Increasing inflation is the primary factor to derail declining bond yields, but is supportive of gold prices. Prudent fiscal management dictates borrowing more when rates are low as long as the proceeds are properly invested. Debt-to-GDP

levels are unlikely to decline until increasing yields provide the incentive to reduce borrowing. Gold vs. Stocks Rhyming With 20 Years Ago. The backdrop for the performance of gold vs. stocks appears similar to the turn of this century, particularly in the U.S. At the onset of 2000, the metal price had been under pressure for about a decade on the back of a strong greenback and rapidly advancing U.S. stock market. Since the end of 2009, the S&P 500 Total Return is about 220% vs. gains of 27% in the trade-weighted broad dollar and 36% in gold. Our bottom graphic depicts the aftermath of that foundation two decades ago, resulting in the outperformance of gold vs. stocks in dollar and euro terms.

Mean Reversion Potential -- Gold vs. U.S. Stocks

In the current decade, euro-denominated gold and the Euro Stoxx 50 Total Return Index have been basically neck and neck. The outperformance of the U.S. stock market vs. gold appears to be at an elevated risk of mean reversion in the coming decade. Underlying Gold Support - Negative Yields, Debt. With little incentive for Japan to reduce its debt-to-GDP level (almost 300%) in a negative-yield environment, the price of gold has underlying support. Inflation lifting yields and pressuring the currency favors gold. Our graphic depicts the yen-based gold price tracking closely with increasing debt-to-GDP.

7

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

Yen Gold Price and Debt-to-GDP, Close Companions

The debt surge and declining bond yields represent the new world of macroeconomics, as we see it. Quasi-currencies such as gold and precious metals, which aren't obligations of any government, stand to be primary beneficiaries. Gold on Sound Footing for Coming Decade. The dollar price of gold is on far more stable ground than it was about a decade ago, in our view. Some combination of sustained greenback strength and rapid stock-market appreciation should be necessary to suppress the metal's price. Simple mean reversion in the extended trade-weighted broad dollar and S&P 500 Index is the greater likelihood. Our graphic depicts the 10-year rate of change in the S&P 500 Total Return at about the greatest since the start of the millennium.

Gold Appears Low vs. Elevated Greenback, Stocks

The dollar is at a similar elevated level vs. the 10-year appreciation of the spot gold price, hovering about the same lows as in 2005, just before launching to the 2011 peak. Bottoming with the Federal Reserve's interest-rate hike in 2015, the gold price appears to be situated for brighter days.

Base Metals, Macro Negative Copper Is Leading Industrial Metals Toward the Cliff's Edge. The passing of time is unfavorable for the copper price. Our graphic depicts primary companions -- the JPMorgan Global Manufacturing PMI, U.S. Treasury bond yields and yuan -- plunging to levels more consistent with copper near its 2016 lows. The unlikelihood of sharp recoveries in these indicators increases the downward migration potential in the copper price. CME-traded futures appear to be hanging on the cliff's edge near support of $2.50 a pound.

Copper Likely to Catch Up to Key Companions

Volatility Says Copper Is Too High. Copper prices appear elevated based on their close, inverse relationship with stock market volatility. Our graphic indicates that a breach of the metal's key support level in place for three years -- about $2.50 a pound -- should be a matter of time, based on the increasing CBOE S&P 500 Volatility Index (VIX). In 1H18, copper peaked at a four-year high as the VIX 200-day average bottomed from its life-of-index low. That extreme, similar to 2007, emphasizes the potential for mean reversion.

Copper Should Decline, Unless the VIX Can

This stock-market volatility measure should revisit resistance from 1H16, when copper bottomed, portending a similar path

8

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

for the metal, in our view. Deteriorating macroeconomic conditions and the Federal Reserve's rapid reversal to easing from tightening are consistent with a rallying VIX and declining copper prices. Copper Is Like Crude: The Trend Has Turned Down. Similar to crude oil, copper prices have slumped, with risks tilted toward further downside, in our view. Essentially unchanged from November 2016, the metal appears to be teetering on a cliff's edge. One of the first solid indicators of the receding macroeconomic tide, the metal signaled a bear market when it declined over 20% to the August low last year. It needs to prove otherwise, and riding the 52-week mean lower since the 1H bounce isn't helping. Our graphic depicts the greater risk is revisiting the bear market lows from 2016, if plunging bond yields are a guide.

Copper Appears Set to Resume Downtrend Since 2011

CME traded copper is about 0.70 annually correlated to the U.S. Treasury 30-year yield over the past 20 years, vs. 0.60 to the 10-year yield. The Nickel Bounce Is Getting Stretched. The best of this year's nickel-price recovery is over, we believe, and the metal risks giving back gains, the way crude oil has. Up over 50% to Aug. 16, notably due to supply disruptions from Indonesia, the rally appears overdone. Indonesia represents only about 7% of global mine production, about one-third that of the largest producer, the Philippines, based on the CRB Commodity Handbook. Our graphic depicts mean-reversion potential, a primary factor nickel has going for it.

Nickel Bumping Into Overbought Resistance

It's about 70% below its 2007 peak vs. 50% for zinc. Catching up to the Bloomberg Industrial Metals Spot Subindex, autoscaled since 2007, gets the nickel price toward $30,000 a ton vs. $16,200 at the Aug. 16 close. The 12-month average of base-metal prices has turned down, putting overbought nickel in a vulnerable position to continue the trend. Nickel Vulnerable to Wobbly China Stock Market. Nickel is increasingly at risk from one of its closest companions, the MSCI China Index. There's little room for further declines in the shaky China stock market and appreciating nickel prices, if history is a guide. Our graphic depicts the index at risk of breaching a support line that has guided prices since the 2016 low, also about when the metal bottomed.

Nickel Upside Limited With Weak China Equities

Increasing use of electric vehicles is often cited as supporting the nickel price, but it's only a small fraction of total demand. The metal is about 0.70 correlated to the MSCI China Index over the past 20 years, measured annually. For comparison, nickel is 0.80 correlated to the Bloomberg Industrial Metals Spot Index.

9

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

PERFORMANCE DRIVERS

Typically a Rabbit, Silver Is Just Catching Up. August's top-performing commodity, silver, reflects what we expect is a more-enduring catch-up to gold. Up about 12% for the month, silver's advance is closer to its typical relationship with gold at about 1.4x. Since the first Federal Reserve interest-rate hike in 2015, spot silver has advanced only about 33% to Aug. 28, vs. 45% for gold. Stalled industrial demand for silver is being mitigated by strong investment interest. The three-month velocity of silver exchange-traded-fund inflows was last seen near the peak of the financial crisis a decade ago.

Nickel is the sole force holding up the industrial metals in 2019. We fear the nickel rally will succumb to good resistance and declining companions. The greater risk into year-end is gold and silver continuing atop the performance board and copper extending the bottom. Negative Macro - Strong Gold, Weak Copper

Agriculture (Index weight: 30% of BCOM) Performance: Aug. -5.1%, 2019 -8.9%, Spot -4.8%)

Grains (Index Weight: 24% of BCOM) Performance: Aug. -5.8%, 2019 -9.3%, Spot -4.6%)

Softs (Weight: 6% of BCOM) Performance: Aug. -7.5%, 2019 -12.2, Spot -8.7%)

Friendly Trends for Bears From Corn to Cotton, Agriculture Price Headwinds Are Picking Up. August's kibosh on corn puts a ceiling on agriculture-sector prices for awhile, in our view. The potential alleviation of trade tensions will focus on soybean prices, but for sustained recovery, the sector needs a declining dollar and some normalization of the strong Corn Belt production trend. What looked just a few months ago like a year of substantial production cuts is turning out to be a mere blip in the march upward. Related to China, U.S. soybean exports near zero don't get lower and the markets are rebalancing. Last year's plunge to near 40% soybean exports-to-production is back toward 50%, based on USDA estimates.

U.S. exports of half -- or more -- of cotton, wheat and soybeans exemplifies the significance of a potential peak dollar, notably vs. the Brazilian real for sustained price recovery. Over Supplied Agriculture Double Red Lights for Agriculture Prices: Corn and the Dollar. Agriculture prices will remain caged with a propensity to decline, in our view. Derailed by corn, the failure of this year's primary rabbit should leave a hangover for an extended period. We fear more of the same that has kept prices under pressure the past few years: strong Corn Belt production and the advancing dollar. Corn, Greenback Pressure Agriculture Prices. The agriculture sector is unlikely to recover until corn leads the way and the dollar peaks, and we think neither is likely in the short term. The line-in-the-sand resistance for corn is about $4 a bushel. Despite a historically challenging Corn Belt sowing season, the production juggernaut is keeping prices in check. Risks of early frost with the late crop are minimal, thus prices are unlikely to breach resistance again this year. A greenback peak similar to 2001-02 appears increasingly elusive despite the Federal Reserve's shift to easing.

10

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

Heavy Ags - Corn Under $4 and Strong Greenback

Most of the rest of the world is adding accommodation, as evidenced by rapidly declining and negative yields. Our primary factors for agriculture price recovery -- some normalization of favorable Corn Belt weather and a peak dollar -- will have to wait for another year. Caged Grains Ease Away Is the Commodity Signal; Even Food Prices Can't Rally. It may be more of a strong dollar situation, but the indication from commodity prices is clear: greater risks are deflationary. The recent kibosh of the recovering grain market from the USDA crop report emphasized the inability of most commodities to sustain gains. Grain Gains Unlikely Until the Greenback Declines. Demand vs. supply conditions are becoming less relevant to grain and agriculture prices and unlikely to sustain gains until the dollar declines, in our view. It's been seven years since the Bloomberg Grains Spot Index could hold a 12-month rate of change of greater than 10 percent. Since the end of 2012, the trade-weighted broad dollar has increased over 30%. With a 30-year annual beta of about negative 1.7x vs. the greenback, grain markets focused on production and U.S.-China trade tensions may be better off watching for a peak greenback to indicate corn, soybean and wheat price recoveries.

Absent a Dollar Peak, Grains Have Limited Upside

Our graphic depicts grain prices, which represent the majority of the agriculture sector, essentially unchanged from the beginning and end of the last Federal Reserve easing cycle. A primary pivot is $4-a-bushel corn.

Corn Bull Kiboshed, Soybeans May Be Final Hope. With the corn recovery crushed, grain sector potential price appreciation should pass to soybeans, which appear in an increasingly secure cage. Absent a definitive U.S.-China trade agreement and/or recovery in the value of the Brazilian real vs. the dollar, soybean prices are unlikely to sustain above $10 a bushel, the average price since the beginning of 2014. Signs of a resumption of exports to China may revisit this resistance, but sustaining above will likely take more substantial macroeconomic fundamentals, such as a peak dollar. Reflecting the overhang of U.S. supply, managed-money net positions are quite short, which helps provide an underlying bid to prices, at least in the near term.

Soybeans Need a Strong Force to Breach $10

Prices Get Support From Shorts Near Record. Elevated soybean shorts tilt price risks to the upside with Corn Belt yields in decline. Managed-money net futures positions in the soybean complex (beans, meal and oil) aren't far removed from record short levels that helped prices bottom

11

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

in early May. Our graphic depicts net positions as a percentage of open interest near 7% short vs. the average of 9% long (since 2006). The database extreme of 16% net short was reached in mid-May. The trend remains downward in prices and toward more shorting, but such extremes should warrant covering caution as a challenging growing season progresses. Covering Risks Increase With Declining Yields

U.S. exports to China have likely reached their nadir. Stocks-to-use appear in early peaking days from near a three-decade high. These are the known knowns that warranting shorts, but mean-reversion risks are historically high. Withering Corn Adds to Deflationary Trends. Plunging corn prices add fuel to the argument for further interest-rate cuts. The 12-month average of the CBOE S&P 500 Volatility Index (VIX) was an early warning when it bottomed from life-of-index (1990) lows in January 2018. In October, the Bloomberg Commodity Index turned down. The primary rabbit for recovering agriculture prices -- corn -- has failed to run amid the latest crop report showing greater-than-expected supply. Potentially more significant, the broad commodity market began turning down and VIX was reverting higher well-before President Donald Trump's May 5 announcement that no deal was reached in U.S.-China trade talks.

Corn's Failed Rally, Part of Receding Macro Tide

Our graphic depicts a key indicator for much lower U.S. interest rates: the strong dollar. The broad commodity market has little chance of a sustained recovery until the greenback peaks. Sending the Corn Bull Back to Its Pen. Corn prices are unlikely to revisit the lows from 2016, as indicated by the upward-sloping 52-week mean, but the 2019 recovery appears similar to last year's thwarted breakout in natural gas. There's just too much supply to support sustained higher prices. With the exception of gold and precious metals, this is the predominant theme in most commodities. Despite the extreme challenges of this year's Corn Belt sowing season, USDA estimates of still-robust production indicates technological advances pressuring prices.

Corn to Meet Rising Support, But Rally Has Failed

This year's harvest will need to sharply miss USDA estimates to support prices, and we think that's unlikely. Absent a U.S.-China trade deal or a peak dollar, the corn bull is back in its cage. The Great U.S. Grain Production Machine. This year's failed corn rally is a prime example of what's ailing commodity prices: U.S.-centric oversupply and a strong dollar. There have been two major Corn-Belt grain production disruptions in the past two decades (2001-02 and 2011-12), which

12

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

boosted prices. Our graphic depicts the current historically challenging sowing season appearing as barely a blip in the rapidly increasing supply trend. Correctly estimating the soaring productivity of U.S. farmers has been the proper outlook for supply and prices.

Steadily Increasing Grain Supply - Lower Prices

Since 1999, corn production has increased about 50%, with an annual standard deviation near 11%. In the previous two decades, production increased only about 30% and with volatility at about triple the present. Heavy Softs Sugar, Coffee, Cotton: Softs at Mercy of Weak Brazilian Real. The predominant trend in dollar-based soft-commodity prices remains down and is unlikely to reverse until the Brazilian real sustains a recovery. A primary driver of coffee and sugar prices may be Brazilian pension reform. Oversupplied cotton, the strong dollar and trade tensions add headwinds to the sector. The Softs Trend Is a Friend to Bears. Plentiful cotton in the U.S and the weakening Brazilian real are headwinds for soft commodity prices that are unlikely to ease, at least in the near term. Our graphic depicts the downward-sloping Bloomberg Softs Spot Subindex, on the back of a three-year low in cotton prices and the real nearing all-time bottoms. Such levels should offer some price support but may just be speed bumps, as the process to pull down prices appears well-entrenched. The real's value is key to determining dollar-based prices, mostly because Brazil is the primary producer of sugar and coffee.

A Powerful Force Is Needed to End This Trend

In the past 12 years, the Bloomberg Softs Spot Subindex has been about 0.64 negatively correlated to the BRLUSD exchange rate. Emphasizing the increasing relationship, the correlation is about 0.40 over 20 years. Brazil's Real Driven By External Backdrop, But Politics Matters. Contributing Analysts Adriana Dupita (Economics) The highly-liquid Brazilian real is sensitive to external factors (U.S. rates, commodity prices, risk aversion). And it eventually decouples in the presence of country-specific factors (policy/reform outlook, as in 2018 elections). An exchange rate of around 3.70 reais per U.S. dollar seems consistent the current external backdrop and with the country's fundamentals -- assuming pension reform passes. Failure to approve a sufficiently strong pension reform could weaken the BRL beyond 4.50 per U.S. dollar, in our view. The BCB does not target any level for the Brazilian real, but it tends to intervene in the market (mostly via derivatives) when faced by sudden, sharp movements. We expect the new BCB Board to unwind part of its USD 68 billion short future dollar position, conditions permitting. External Factors Drive BRL, but Politics Matters

13

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

PERFORMANCE DRIVERS

Lower Prices Not Curing Agriculture, Yet. There's little to alleviate red-on-the-screen in agriculture prices in the near term, in our view. A definitive U.S.-China trade agreement is a prime candidate, but it's unlikely. Emphasizing a key driver of declining prices, the Brazilian real has fallen about 6% this year through late August, adding pressure on the Bloomberg Agriculture Spot Subindex, which is down about 4%. The old axiom, "lower prices are the cure for lower prices," is supporting demand, but the strong greenback is keeping a lid on dollar-based commodities.

Agriculture Red-on-the-Screen Likely Enduring

A key bearish take-away from this year's performance graphic is that despite a very challenging Corn Belt sowing season, the Bloomberg Grains Spot Index has declined about 5% through Aug. 27. Fears of severe production cuts in 2019 now appear as a mere blip in the strong supply trend.

14

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

DATA on BI COMD Performance - Overview Key Metrics

Historical Performance may vary from above due to delayed end date

15

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

Performance – Commodity Total Returns Key Metrics

Historical

16

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

Performance – Prices Key Metrics

Historical

17

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

Performance - Volatility Key Metrics

18

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

Curve Analysis – Contango (-) | Backwardation (+) Key Metrics

Measured via the one-year futures spread as a percent of the first contract price. Negative means the one-year out future is higher (contango). Positive means the one-year out future is lower (backwardation.

Historical

19

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

Curve Analysis – Gross Roll Yield Key Metrics

Historical

20

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

Curve Analysis – Forwards / Forecasts Spread %

Data Set

21

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

Market Flows – Open Interest Key Metrics

Historical

22

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

Market Flows – Commitment of Traders Key Metrics

Historical

23

Bloomberg Commodity Outlook – September 2019 Edition Bloomberg Commodity Index (BCOM)

Market Flows – ETF Flows (annual)

24

Composite Indices * Click hyperlinks to open in Bloomberg

Aug YTD 1-Year 3-Year 5-Year 10-Year 20-Year 30-Year 40-Year 50-YearBloomberg Commodity ER BCOM -2.48% 0.38% -8.04% -6.97% -39.16% -38.75% -12.70% -12.10% -27.61% 396.94%Bloomberg Commodity TR BCOMTR -2.32% 1.93% -5.89% -2.58% -36.13% -35.44% 23.48% 106.12% 326.14% 5402.35%

Bloomberg Commodity Spot BCOMSP -2.20% 3.21% -4.75% 8.26% -16.62% 5.94% 218.12% 259.17% 297.76% 1859.77%Bloomberg Roll Select BCOMRST -2.62% 0.45% -7.71% -2.32% -32.72% -24.82% 160.89%

1 Month Forward BCOMF1T -2.42% 1.72% -6.07% -1.21% -33.22% -27.27% 114.76% 2 Month Forward BCOMF2T -2.63% 1.52% -3.82% 2.93% -30.24% -25.45% 159.36% 3 Month Forward BCOMF3T -2.57% 1.57% -5.72% 1.59% -29.90% -23.17% 171.18% 4 Month Forward BCOMF4T -2.61% 1.61% -5.74% 3.55% -26.78% -16.93% 5 Month Forward BCOMF5T -2.54% 2.16% -5.39% 4.53% -25.75% -16.21% 6 Month Forward BCOMF6T -2.66% 1.88% -4.93% 5.28% -24.61% -14.53%

Energy BCOMENTR -5.70% 4.47% -18.44% 0.52% -62.39% -71.05% -49.84% 22.77%Petroleum BCOMPETR -7.11% 16.46% -19.62% 19.55% -57.81% -49.16% 75.86%Agriculture BCOMAGTR -5.05% -8.85% -10.62% -26.18% -40.47% -34.57% -33.70% -24.02% 6.20% 1384.38%

Grains BCOMGRTR -5.81% -9.27% -11.30% -19.78% -41.08% -37.09% -43.90% -47.77% -39.86% 397.28%Industrial Metals BCOMINTR 0.51% 6.70% -0.48% 24.10% -14.68% -19.31% 117.60%Precious Metals BCOMPRTR 7.60% 18.02% 25.71% 8.61% 7.64% 41.60% 374.34% 302.25% 271.47%

Softs BCOMSOTR -7.50% -12.22% -13.34% -44.43% -51.12% -48.77% -55.05% -40.27% 16.55% 2455.82%Livestock BCOMLITR -8.86% -12.67% -5.12% -4.28% -29.99% -18.00% -51.20% -25.82%Ex-Energy BCOMXETR -0.76% 0.95% 0.63% -4.49% -22.49% -12.91% 44.30%

Ex-Petroleum BCOMXPET -0.70% -1.81% -1.47% -9.11% -31.64% -34.83%Ex-Natural Gas BCOMXNGT -2.48% 4.40% -4.92% 1.60% -30.27% -19.55%Ex-Agriculture BCOMXAGT -1.24% 6.69% -4.12% 8.98% -35.41% -38.32%

Ex-Grains BCOMXGRT -1.67% 4.25% -5.01% 1.34% -35.37% -37.01%Ex-Industrial Metals BCOMXIMT -2.93% 0.86% -7.06% -7.97% -40.32% -39.36%Ex-Precious Metals BCOMXPMT -4.37% -1.19% -11.12% -5.05% -42.77% -44.67%

Ex-Softs BCOMXSOT -1.96% 3.01% -5.34% 1.38% -35.32% -35.10%Ex-Livestock BCOMXLIT -1.94% 2.90% -6.03% -2.65% -36.66% -36.61%

Ex-Agriculture & Livestock BCOMXALT -0.60% 8.60% -4.24% 9.87% -36.29% -40.37%Bloomberg Dollar Spot BBDXY 0.64% 1.73% 2.89% 2.42% 18.18% 21.11%S&P 500 Total Return SPXT -1.58% 18.34% 2.92% 43.15% 61.89% 253.08% 226.01% 1480.24%

US Aggregate LBUSTRUU 2.59% 9.10% 10.17% 9.55% 17.89% 46.78% 170.59% 486.03% 1639.69%US Treasury LUATTRUU 3.40% 8.63% 10.38% 7.65% 15.78% 37.62% 151.41% 436.79% 1514.57%

US Corporate LUACTRUU 3.14% 13.94% 13.33% 14.58% 24.95% 76.01% 226.29% 635.83% 2097.27%US High Yield LF98TRUU 0.40% 11.00% 6.56% 19.69% 26.73% 126.11% 289.32% 924.62%

Single Commodity Indices

Aug YTD 1-Year 3-Year 5-Year 10-Year 20-Year 30-Year 40-Year 50-YearNatural Gas BCOMNGTR -0.21% -24.49% -22.61% -45.68% -78.51% -94.46% -99.45%

Low Sulfer Gas Oil BCOMGOT -7.10% 9.83% -17.34% 36.23% -47.75% -25.79% 247.30%WTI Crude BCOMCLTR -5.65% 19.68% -20.88% 14.17% -66.05% -65.06% 9.43% 192.42%

Brent Crude BCOMCOT -8.06% 15.06% -19.28% 27.74% -58.37% -35.43% 270.90%ULS Diesel BCOMHOTR -7.02% 10.46% -16.63% 24.28% -47.27% -30.59% 148.84% 325.91%

Unleaded Gasoline BCOMRBTR -9.00% 22.05% -19.30% 12.13% -51.56% -14.72% 241.61% 739.13%Corn BCOMCNTR -9.48% -8.02% -7.61% -15.93% -40.79% -35.21% -79.50% -84.11% -81.74% -35.18%

Soybeans BCOMSYTR -1.26% -7.23% -3.73% -21.24% -27.36% 14.14% 204.48% 215.10% 227.83% 3446.93%Wheat BCOMWHTR -5.50% -9.19% -17.24% -17.05% -49.80% -70.58% -87.98% -91.55% -89.80% -28.02%

Soybean Oil BCOMBOTR 2.22% 0.42% -3.66% -21.56% -26.40% -47.23% -23.15% -23.65% -24.87% 2755.14%Soybean Meal BCOMSMT -3.15% -8.05% -7.79% -14.98% -16.07% 94.22% 946.65%HRW Wheat BCOMKWT -9.63% -25.13% -36.20% -37.58% -69.82% -74.71% -79.69%

Copper BCOMHGTR -4.43% -2.34% -3.64% 19.46% -22.90% -20.84% 251.56% 537.37%Alumnium BCOMALTR -2.90% -6.96% -19.15% 6.13% -25.47% -40.09% -27.62%

Zinc BCOMZSTR -9.64% -5.79% -2.30% 6.26% -0.15% 0.64% 38.34%Nickel BCOMNITR 23.98% 68.52% 40.67% 80.68% -9.10% -16.02% 347.69%Gold BCOMGCTR 6.55% 18.39% 26.06% 13.82% 14.55% 50.22% 432.57% 306.58% 334.48%Silver BCOMSITR 11.10% 16.87% 24.66% -5.57% -11.86% 9.89% 198.99% 196.69% 24.54%Sugar BCOMSBTR -8.61% -7.89% -1.49% -51.99% -51.86% -67.85% -19.22% 9.43% -55.40% 123.29%Coffee BCOMKCTR -6.00% -14.10% -16.13% -51.58% -71.02% -67.70% -90.73% -85.45% -79.41%Cotton BCOMCTTR -7.69% -18.57% -29.50% -9.17% -10.50% 34.83% -68.54% -51.91% 146.81% 983.21%

Live Cattle BCOMLCTR -7.95% -12.38% -6.00% 4.83% -17.97% -3.60% -7.03% 68.73% 603.61% 3344.92%Lean Hogs BCOMLHTR -10.38% -14.24% -3.61% -20.31% -49.32% -38.58% -83.09% -84.29%

Index Name Ticker

Index Name Ticker

PERFORMANCE: Bloomberg Commodity Indices

2019

2019

25

Composite Roll Select Indices * Click hyperlinks to open in Bloomberg

Aug YTD 1-Year 3-Year 5-Year 10-Year 20-Year 30-Year 40-Year 50-YearBCOM Roll Select BCOMRST -2.62% 0.45% -7.71% -2.32% -32.72% -24.82% 160.89%

Roll Select Agriculture BCOMRAGT -5.01% -9.02% -11.01% -22.88% -38.08% -25.02% 23.39%Roll Select Ex-Ags & Livestock BBURXALT -1.05% 6.24% -6.85% 9.62% -31.47% -29.22%

Roll Select Grains BCOMRGRT -5.90% -9.22% -11.82% -15.93% -37.82% -28.48% 9.93%Roll Select Softs BCOMRSOT -6.94% -13.00% -13.77% -44.65% -52.14% -40.13% -17.89%

Roll Select Livestock BCOMRLIT -8.86% -11.97% -6.28% -18.17% -37.67% -12.79% 41.29%Roll Select Energy BCOMRENT -6.48% 0.11% -22.19% 0.64% -55.02% -58.81% 97.42%

Roll Select Ex-Energy BCOMRXET -0.81% 0.71% -0.12% -4.18% -21.94% -5.71% 143.75%Roll Select Petroleum BCOMRPET -7.69% 11.76% -20.56% 20.02% -49.83% -31.70% 381.75%

Roll Select Industrial Metals BCOMRINT 0.36% 6.10% -1.85% 23.08% -14.83% -14.91% 222.41%Roll Select Precious Metals BCOMRPRT 7.59% 17.94% 25.62% 8.63% 8.04% 42.79% 393.19%

Single Commodity Roll Select Indices

Aug YTD 1-Year 3-Year 5-Year 10-Year 20-Year 30-Year 40-Year 50-YearNatural Gas RS BCOMRNGT -2.25% -27.60% -29.96% -42.60% -71.97% -89.61% -90.45%

Low Sulfer Gas Oil RS BCOMRGOT -6.84% 7.75% -18.91% 28.58% -47.24% -24.89% 276.72%WTI Crude RS BCOMRCLT -7.38% 15.10% -19.05% 17.42% -53.09% -39.86% 367.00%

Brent Crude RS BCOMRCOT -8.06% 10.19% -21.91% 26.82% -51.50% -28.10% 469.28%ULS Diesel RS BCOMRHOT -6.96% 9.47% -17.55% 16.59% -47.94% -32.88% 310.49%

Unleaded Gasoline RS BCOMRRBT -9.00% 12.78% -21.92% 18.01% -41.90% -1.43% 431.99%Corn RS BCOMRCNT -9.67% -7.43% -7.07% -11.82% -36.37% -27.60% -60.40%

Soybeans RS BCOMRSYT -1.41% -5.72% -2.25% -9.68% -16.73% 42.51% 367.62%Wheat RS BCOMRWHT -5.50% -12.47% -22.44% -24.59% -55.30% -69.35% -61.16%

Soybean Oil RS BCOMRBOT 2.16% 0.12% -4.12% -21.64% -26.18% -41.43% 11.53%Soybean Meal RS BCOMRSMT -3.35% -7.51% -6.60% -2.96% -8.75% 123.37% 1337.96%HRW Wheat RS BCOMRKWT -9.48% -26.51% -36.95% -36.86% -68.43% -71.87% -51.65%

Copper RS BCOMRHGT -4.52% -2.44% -4.67% 19.98% -23.36% -17.23% 396.58%Alumnium RS BCOMRALT -3.21% -7.58% -20.15% 3.11% -25.19% -36.36% 6.57%

Zinc RS BCOMRZST -9.75% -6.85% -4.97% 4.84% -1.53% 5.63% 117.82%Nickel RS BCOMRNIT 23.94% 67.36% 39.59% 80.04% -8.47% -10.37% 639.06%Gold RS BCOMRGCT 6.55% 18.35% 26.02% 13.90% 15.07% 51.03% 439.58%Silver RS BCOMRSIT 11.06% 16.66% 24.39% -5.67% -11.63% 12.01% 234.52%Sugar RS BCOMRSBT -7.21% -9.35% -3.80% -54.28% -55.41% -62.84% 80.12%Coffee RS BCOMRKCT -6.01% -14.33% -15.35% -51.03% -70.04% -63.62% -84.55%Cotton RS BCOMRCTT -7.95% -19.08% -29.49% -7.00% -10.20% 59.91% -47.26%

Live Cattle RS BCOMRLCT -7.95% -12.49% -7.81% -1.31% -20.89% 1.69% 58.63%Lean Hogs RS BCOMRLHT -10.38% -10.37% -0.65% -40.28% -59.14% -33.88% -2.94%

PERFORMANCE: Bloomberg Commodity Roll Select Indices

Index Name Ticker

Index Name Ticker

2019

2019

26

BCOM Constituent Weights BCOM Index MEMB <GO> * Click hyperlinks to open in Bloomberg

Group Commodity TickerAug 2019 Contrib

to Return %Aug 30 2019

Weight %Jul 31 2019 Weight %

Aug 2019 Weight% Change

2019 Target Weight

Natural Gas NG -0.01 6.69 6.29 0.40 8.26%Low Sulfer Gas Oil QS -0.21 2.68 2.83 (0.15) 2.62%

WTI Crude CL -0.52 8.54 8.92 (0.37) 7.66% Brent Crude CO -0.66 7.53 8.02 (0.49) 7.34% ULS Diesel HO -0.17 2.23 2.33 (0.11) 2.16% Gasoline XB -0.29 2.53 3.06 (0.54) 2.29%Subtotal -1.86 30.20 31.45 (1.25) 30.34%

Corn C -0.59 5.66 5.99 (0.33) 5.89% Soybeans S -0.08 5.62 5.58 0.04 6.03%

Wheat W -0.16 2.79 2.87 (0.08) 3.14% Soybean Oil BO 0.06 3.11 2.98 0.13 3.10%

Soybean Meal SM -0.11 3.13 3.17 (0.04) 3.44% HRW Wheat KW -0.11 1.01 1.06 (0.04) 1.29%

Subtotal -0.98 21.32 21.64 (0.32) 22.90% Copper HG -0.33 7.03 7.18 (0.15) 7.32%

Aluminum LA -0.13 4.06 4.06 0.00 4.41% Zinc LX -0.30 2.80 3.04 (0.24) 3.21%

Nickel LN 0.82 4.33 3.42 0.91 2.71%Subtotal 0.06 18.23 17.71 0.52 17.65%

Gold GC 0.86 14.40 13.24 1.16 12.24% Silver SI 0.44 4.49 3.93 0.56 3.89%

Subtotal 1.30 18.90 17.17 1.72 16.13% Sugar SB -0.26 2.75 2.95 (0.20) 3.15% Coffee KC -0.15 2.32 2.33 (0.01) 2.48% Cotton CT -0.10 1.14 1.21 (0.07) 1.42%

Subtotal -0.51 6.21 6.49 (0.28) 7.05% Live Cattle LC -0.28 3.26 3.47 (0.21) 4.09% Lean Hogs LH -0.22 1.88 2.06 (0.18) 1.85%Subtotal -0.50 5.14 5.53 (0.38) 5.94%

Total -2.48 100.00 100.00 100.00%

Energy

Livestock

Softs

Precious Metals

Industrial Metals

Grains

27

BLOOMBERG INTELLIGENCE: COMMODITY DASHBOARDS BI <GO> * Click hyperlinks to open in Bloomberg

Crude Oil Production: BI OILS <GO> Natural Gas Production: BI NGAS <GO>

Precious Metal Mining: BI PMET <GO> Agricultural Chemicals: BI AGCH <GO>

Copper: BI COPP <GO> Aluminum: BI ALUM <GO>

BI provides analysis on several key drivers of BCOM performance; industrial and precious metals mining, oil and natural gas production, and agricultural chemicals. The dashboards include key macro data libraries and interactive charting and commentary from analysts with an average of seventeen years of experience.

28

COMMODITY CHEAT SHEET FOR THE BLOOMBERG PROFESSIONAL® SERVICE

* Click hyperlinks to open in Bloomberg

Broad Commodities EnergyTop commodity news CTOP Top energy news ETOPGlobal commodity prices GLCO Top oil news OTOP Commodity playbook CPLY Crude Oil Production Dashboard BI OILSCommitments of traders report COT First Word oil NI BFWOIL Calendar of commodity events ECO17 News on oil inventories TNI OIL INV Commodity arbitrage calculator CARC Oil Buyer's Guide newsletter NI OBGBRIEFCommodity fundamental data explorer FDM Pipes & Wires newsletter NI PAWSBRIEFCommodity futures overview CMBQ Oil market analysis BOILSecurity finder SECF Nat gas spot prices BGASCommodity data contributors & broker CDAT Forward European utility markets EUMContract table menu CTM News on oil markets NI OILMARKET Seasonality chart SEAG News on OPEC NI OPEC Commodity curve analysis CCRV OPEC production and prices OPECCommodity fair values CFVL Oil markets menu OIL Commodity price forecasts CPFC Crude stored in tankers NOONCommitments of Traders Report COT Refinery outages REFOCommodity maps BMAP Oil’s decline EXT5 Commodity options monitor OMON Oil versus inflation expectations SWIFCommodities charts COSYCommodity Investors menu CMNV MetalsUS exchange traded product fund flows ETF Top metal news METT

Precious metal dashboard BI PMETGBase metals dashboard BI BMET

Commodity Indices Metals prices and data MINE Index description BCOM Index DES Precious metals prices and rates MTL Index constituent weights BCOM Index MEMB Metals Bulletin MB Listed index futures BCOM Index CT COMEX inventories COMX Option volatility surface BCOM Index OVDV LME monitor LME Seasonality chart BCOMNG Index SEAG LME implied volatilities LMIV Commodity index futures movers FMV LME warehouse inventories LMEI Commodity index ranked returns CRR

AgricultureWeather Top agriculture news YTOP Global weather database WETR Agriculture calendar AGRI US snow monitor SNOW Agriculture spot prices AGGPEU weather & utility models EUMM Agriculture supply & demand AGSD

Crop calendar CCAL

BCOM QUICK FACTS Index Methodology

Weighting Bias 2/3 market liquidity and 1/3 world production No. of Commodities 20 Re-balancing Frequency Annual Roll Schedule Monthly (5 day roll) Caps/Limits Single commodity: max 15%

Single commodity and its derivatives: max 25%Related commodity groups: max 33%

First Value Date 30 December 1990

The data provided in this report can be easily accessed on the Bloomberg Professional® service along with numerous news and analytical tools to help you stay on top of the commodity markets.

29

BLOOMBERG, BLOOMBERG INDICES and BCOM are trademarks or service marks of Bloomberg Finance L.P.

Bloomberg Finance L.P. and its affiliates ("collectively, "Bloomberg") or Bloomberg's licensors own all proprietary

right in the BLOOMBERG INDICES or BCOM. Bloomberg does not guarantee the timeliness, accuracy or

completeness of any data or information relating to BLOOMBERG INDICES or BCOM. Bloomberg makes no

warranty, express or implied, as to the BLOOMBERG INDICES or BCOM or any data or values relating thereto or

results to be obtained therefrom, and expressly disclaims all warranties of merchantability and fitness for a particular

purpose with respect thereto. It is not possible to invest directly in an index. Back-tested performance is not actual

performance. Past performance is not an indication of future results. To the maximum extent allowed by law,

Bloomberg, its licensors, and its and their respective employees, contractors, agents, suppliers and vendors shall

have no liability or responsibility whatsoever for any injury or damages - whether direct, indirect, consequential,

incidental, punitive or otherwise - arising in connection with BLOOMBERG INDICES or BCOM or any data or

values relating thereto - whether arising from their negligence or otherwise. This document constitutes the provision

of factual information, rather than financial product advice. Nothing in the BLOOMBERG INDICES or BCOM

shall constitute or be construed as an offering of financial instruments or as investment advice or investment

recommendations (i.e., recommendations as to whether or not to “buy”, “sell”, “hold”, or to enter or not to enter into

any other transaction involving any specific interest or interests) by Bloomberg or its affiliates or a recommendation

as to an investment or other strategy by Bloomberg or its affiliates. Data and other information available via the

BLOOMBERG INDICES or BCOM should not be considered as information sufficient upon which to base an

investment decision. All information provided by the BLOOMBERG INDICES or BCOM is impersonal and not

tailored to the needs of any person, entity or group of persons. Bloomberg and its affiliates do not express an opinion

on the future or expected value of any security or other interest and do not explicitly or implicitly recommend or

suggest an investment strategy of any kind. Customers should consider obtaining independent advice before making

any financial decisions. © 2016 Bloomberg Finance L.P. All rights reserved. This document and its contents may

not be forwarded or redistributed without the prior consent of Bloomberg.

The BLOOMBERG PROFESSIONAL® service and BLOOMBERG Data (the “Services”) are owned and

distributed by Bloomberg Finance L.P. (“BFLP”) in all jurisdictions other than Argentina, Bermuda, China, India,

Japan, and Korea (the “BLP Countries”). BFLP is a wholly owned subsidiary of Bloomberg L.P. (“BLP”). BLP

provides BFLP with global marketing and operational support and service for the Services and distributes the

Services either directly or through a non-BFLP subsidiary in the BLP Countries. Certain functionalities distributed

via the Services are available only to sophisticated institutional investors and only where the necessary legal

clearance has been obtained. BFLP, BLP and their affiliates do not guarantee the accuracy of prices or information

in the Services. Nothing in the Services shall constitute or be construed as an offering of financial instruments by

BFLP, BLP or their affiliates, or as investment advice or recommendations by BFLP, BLP or their affiliates of an

investment strategy or whether or not to “buy”, “sell” or “hold” an investment. Information available via the

Services should not be considered as information sufficient upon which to base an investment decision.

BLOOMBERG, BLOOMBERG PROFESSIONAL, BLOOMBERG MARKETS, BLOOMBERG NEWS,

BLOOMBERG ANYWHERE, BLOOMBERG TRADEBOOK, BLOOMBERG TELEVISION, BLOOMBERG

RADIO, BLOOMBERG PRESS and BLOOMBERG.COM are trademarks and service marks of BFLP, a Delaware

limited partnership, or its subsidiaries. © 2016 Bloomberg Finance L.P. All rights reserved. This document and its

contents may not be forwarded or redistributed without the prior consent of Bloomberg.

Bloomberg Intelligence is a service provided by Bloomberg Finance L.P. and its affiliates. Bloomberg Intelligence

shall not constitute, nor be construed as, investment advice or investment recommendations (i.e., recommendations

as to whether or not to “buy”, “sell”, “hold”, or to enter or not to enter into any other transaction involving any

specific interest) or a recommendation as to an investment or other strategy. No aspect of the Bloomberg

Intelligence function is based on the consideration of a customer's individual circumstances. Bloomberg Intelligence

should not be considered as information sufficient upon which to base an investment decision. You should

determine on your own whether you agree with Bloomberg Intelligence.

Bloomberg Intelligence is offered where the necessary legal clearances have been obtained. Bloomberg Intelligence

should not be construed as tax or accounting advice or as a service designed to facilitate any Bloomberg Intelligence

subscriber's compliance with its tax, accounting, or other legal obligations. Employees involved in Bloomberg

Intelligence may hold positions in the securities analyzed or discussed on Bloomberg Intelligence.

30